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3PL Contract Reviews and Tender Management
Over time, following a period of growth, or international expansion, many companies may be required to select and outsource some of their fundamental Supply Chain operations, to a third-party- provider.
Go Supply Chain Consulting has significant experience in the outsourcing third-party- providers, specifically so, the outsourcing of logistics services providers (LSPs). LSPs offer customers the possibility to outsource logistics services for the complete range of supply chain functions and needs.
A popular choice, and a useful resource once correctly integrated into a company’s Supply Chain, LSPs do however require an initial detailed sourcing and selection process, including the final negotiation and contract agreement.
This process of negotiation is referred to as: Tender Management; for which the Go Supply Chain have worked in the bid-teams of leading logistics service providers, and on behalf of numerous major clients, within the procurement of logistics services.
Key supply chain functions which can be outsourced to Tender include:
• Warehouse operations
• Freight Forwarding
• Value added services
Our approach to outsourcing logistics services is as follows:
• Work with you to develop an insource vs outsource strategy
• Help you to identify the relevant vendors for the logistics functions you plan to outsource
• Manage the request for information (RFI) process to create a shortlist of key vendors to ask for a detailed bid
• Specify your requirement in a detailed request for quotation (RFQ) process to ensure that meaningful, directly comparable offers are made
• We will help you to evaluate the comparative bids enabling you to understand the value proposition and the risks involved with each provider
• We will engage with you and the selected supplier in the negotiation and contracting phase advising you on what to expect and how you can drive further value for your business
• Following selection and contract award we will support the implementation planning and review the operation to ensure what was promised has been delivered
Without a comprehensive understanding of the pros and cons of outsourcing logistics functions, or even changing providers for your business – the first time can bring big potential risks ranging from commercial disagreements with the chosen service provider to service disruption, resulting in lost sales and customer service issues.
The Go Supply Chain team can help your business to determine a strategy you can use, to start the outsourcing process for the relevant logistics functions.
An additional service we offer is LSP contract reviews. It can be very tempting when you already have a logistics service provider and are looking for cost reductions to carry out a tender process for “benchmarking” purposes. The thing to remember is that it often takes significant time and resources for an LSP to respond during a tender process.
Regularly running “benchmarking” processes with no intention of changing provider will risk damaging relationships with LSPs they may even stop responding to your future requests.
The alternative is to review your existing contract and operation to identify where there is potential to find efficiencies. We can help you to carry out contract reviews when what you are looking for is a reduction in logistics costs rather than a change of provider.
Go Supply Chain Consulting can help you to manage your suppliers and operations to achieve the most value from your logistics functions and overall supply chain.
- What do we want to outsource? What is the requirement?
- Should this be outsourced does it fit the business strategy?
- Who could the requirement be outsourced to?
- What will be the selection criteria for a supplier?
- How can the benefits in a supplier’s proposal be validated?
- Does a supplier proposal match the requirements, what are the gaps?
- Selection of a supplier that cannot deliver your requirement
- Lost customer sales
- Service disruption to clients
- Additional capital expenditure that was not forecast
- Higher ongoing operating costs than expected
- Commercial and contractual disagreements